Slow e-commerce take-up realistic: survey author

The relatively low proportion of businesses using e-commerce may indicate saturation, or at least an end to high growth, says Delwyn Clark of Waikato University.

The relatively low proportion of businesses using e-commerce may indicate saturation, or at least an end to high growth, says Delwyn Clark of Waikato University.

In the face of figures in a survey she helped conduct, which indicate hardly any growth at all since last year in several important respects, Clark resists suggestions that the figures are “disappointing”. She prefers to see it as a case of businesses becoming “realistic” — seeing through the initial hype that accompanied e-commerce.

Current levels may be simply the extent to which New Zealanders want to use e-commerce, she says. Bearing in mind the small size of New Zealand businesses, there is no real reason why they would be expected to display rapid growth, she says.

Several indicators in the survey are flat. The proportion of products exposed online has actually pulled back, from 45% in 2001 to 41% in the latest survey, and expectation of future growth in online exposure and sales had also reduced, from 15% to 11%.

She doubts the suggestion that the apparent flattening was a pause for consideration before growth roared away again. “I think it’s more a matter of ‘steady as she goes’,” she says, with more moderate growth likely from now on.

But, she notes, businesses not doing e-commerce in-house may well be outsourcing it to a hosting company or using a bank’s online payment processing facility.

Frank March, at the Ministry of Economic Development, says email use has in his view definitely gone as far as it can go. “The people who aren’t using it now [a few percent of the population] will probably never use it,” he says.

The perceived values of e-commerce to New Zealand businesses have changed between the two surveys, Clark says.

The factors that have increased between the two years relate to increase in efficiency of the business. The perceived value of external benefits, such as “developing new sales channels”, have dropped back.

Asked whom they would consult for advice on setting up an e-commerce presence, survey respondents showed a distinct disinclination to use government services, preferring to consult with “a friend” or a private consultant.

Bronwyn Howell, of Victoria University’s Institute for the Study of Competition and Regulation, says the Waikato figures show that with e-commerce use we are in the top half of the OECD rankings, the Prime Minister’s vaunted goal for the whole of the New Zealand economy.

Like Australia and Canada, she says, we went through a phase when businesses were doing e-commerce simply because their competitors were doing it. “Now they’re measuring the value of what they’re doing.”

The statistics show businesses are now putting their energy into internally smartening up their business act, not into direct online sales, and that’s good, Howell says. This defies the typical view that transacting online is the most sophisticated end of e-commerce, and something that must be implemented to show the business is really an e-business.

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